A businessman has been jailed after he claimed more than £40,000 in VAT on a minibus firm which did not exist.

Omar Mayet registered Batley Cabs National Services in 2010 with Custom and Excise saying he was providing passenger services using a 15-seater mini-bus.

Jon Gregg prosecuting told Leeds Crown Court today the number of seats was significant since it meant he would not be able to charge VAT to passengers but could reclaim it from the excise for running costs.

He then submitted a claim for VAT repayment every quarter until March 2013 when payments were stopped and an investigation began.

By that time he had claimed more than £45,000 but as a result of the claims being halted had received £35,771 in total. He was not helpful to the investigation and eventually on July 11 this year his house was raided.

“There was nothing that would support the running of a taxi business not so much as an air freshener shaped like a pine tree,” Mr Gregg told the court.

When he was arrested Mayet confessed it was “a phoney company” and the claim was dishonest from the outset because of financial debts.

“I have done wrong, I have claimed VAT, I’m going to be honest,” he said admitting he had never owned a minibus or had a taxi licence. “I should have admitted it straight away.”

Daniel Gaskell told the court in mitigation for Mayet he had acted because of financial problems which had only got worse.

“He acted alone, it was a fairly naïve act which almost inevitably would have been discovered because he used his own address and name,” said Mr Gaskell.

He said Mayet had borrowed £11,000 from friends and relatives to make an offer to start paying back what he owed and if he lost his liberty a business he now ran with a partner would be in jeopardy and it would hit his wife and two children.

Mayet, 30 of Lichfield Road, Dewsbury was jailed for 18 months after he admitted the fraudulent claim.

Recorder Sara Dodd told him the offence was over a substantial period and showed a “level of sophistication and research” knowing the size of the minibus which could trigger the claims.

She said while it might have started to pay debts it had then continued out of greed.